Do we still need tax-exempt status for churches?

[Rhea]

Originally in the USA, it was to prevent government from imposing different, non-uniform and unfair taxes on a religion in an effort to shut it down. Right?


So is that still necessary? It makes religions do flips and twists to avoid being political, which they really want to do. And it takes millions of dollars off the property tax rolls leaving churches with tangible property that is not exactly being used for public good, but rather as a clubhouse.

In the EOG forum, Dr.Zoidberg points out that

In Sweden a religion does not have tax exempt status. So there is no legal need to define it. So we don't. This has taken all the wind out of any debate on what constitutes a religion. It is a non-issue and it has always been a non-issue. Yes, Sweden too has church/state separation. Just like USA.

So what does an American church get out of being tax exempt.
Are Sweden and other countries offering tax exempt status to any organization? Why, why not?

I'm pondering the possibility that maybe there is no reason for anyone to have a tax exempt status.
Pros? Cons?

 

[AthenaAwakened]

Do we still need tax-exempt status for churches?

Just because they are churches? No.

Now church based activities that benefit society in a non sectarian way (say like low cost to no cost to parent daycare) that should be tax exempt, but that should be taxed exempt whether or not a church is involved.

 

[Rhea]

Why? Why should low-cost daycare be tax exempt? I mean, I kinda have a similar feeling, byut I'm trying to figure out WHY? It amounts to a reliable income stream, really. Unlike grants that have to be applied for. So what societal benefit does supporting the daycare via property tax reduction do that giving vouchers to needy parents won't do? Is it more efficient even though it winds up giving the benefit to low cost and high cost alike?

 

[ksen]

No.

Back when I was going to a church I was the chairman of the deacon board. I tried to get the board and the pastors to agree to getting rid of our tax-exempt status because in my view it only served to keep the pastors from talking about certain things for fear of losing their tax-exempt status.

I was shot down with the excuse that if the church didn't have its tax-exempt status donations would suffer. I suggested that if you really believe god will provide for your needs then it wouldn't matter if the organization had a tax-exempt status or not. I also suggested that if the only reason the members gave was because of our tax-exempt status then maybe they weren't giving for the right reasons.

Anyway, I was soon off the board and out of that church and have never darkened the door of a church since and probably never will again.

 

[AthenaAwakened]

Why? Why should low-cost daycare be tax exempt? I mean, I kinda have a similar feeling, byut I'm trying to figure out WHY? It amounts to a reliable income stream, really. Unlike grants that have to be applied for. So what societal benefit does supporting the daycare via property tax reduction do that giving vouchers to needy parents won't do? Is it more efficient even though it winds up giving the benefit to low cost and high cost alike?

The idea behind tax exemption of charities is that they provide services that would have to be provided by the government if not by the NGO. To encourage charities to provide these services, incentives are offered, like tax exemption.

I would suppose that depending on the service provided and under what circumstance, tax exemption or vouchers or some other incentive (or combination there of) fits or doesn't fit better

 

[DrZoidberg]

I'm pondering the possibility that maybe there is no reason for anyone to have a tax exempt status.
Pros? Cons?

Why USA introduced it is easy to understand. Back in the day there were many social services that were only provided by churches. Their work was an obvious boon to society. So society wanted to encourage their work. But now of course there's social services and so on. There is no boon provided by churches that cannot be provided via other ways. It's basically a subsidy. An unfair market advantage to religions.

Sweden only introduced the church/state separation 1991 years ago. So we already had all the social services in place at that time. So there was no good argument for any subsidy.

It should be pointed out that churches in Sweden can receive money from the state. But so can anybody who puts together any kind of non-profit club. Be it health club, chess club, scouts and so on. All it needs to be is some association of some sort with meetings and a non-profit status.

 

[Rhea]

I'm pondering the possibility that maybe there is no reason for anyone to have a tax exempt status.
Pros? Cons?

Why USA introduced it is easy to understand. Back in the day there were many social services that were only provided by churches. Their work was an obvious boon to society. So society wanted to encourage their work. But now of course there's social services and so on. There is no boon provided by churches that cannot be provided via other ways. It's basically a subsidy. An unfair market advantage to religions.

Sweden only introduced the church/state separation 1991 years ago. So we already had all the social services in place at that time. So there was no good argument for any subsidy.

It should be pointed out that churches in Sweden can receive money from the state. But so can anybody who puts together any kind of non-profit club. Be it health club, chess club, scouts and so on. All it needs to be is some association of some sort with meetings and a non-profit status.

So that is similar to USA in that any non-profit can get similar tax exempt status.

One thing I ponder though is that by the use of property tax exemption and sales tax exemption, it puts the funding for the non-profit directly onto its own community, which, if it is to help low-income people, may be the place least able to support it.
edited to clarify: Because property taxes and sales taxes are collected by and for local governments; towns, villages, cities.

Is Sweden's (or other countries') support from a federal level?
I think I'd like that better....

 

[DrZoidberg]

Why USA introduced it is easy to understand. Back in the day there were many social services that were only provided by churches. Their work was an obvious boon to society. So society wanted to encourage their work. But now of course there's social services and so on. There is no boon provided by churches that cannot be provided via other ways. It's basically a subsidy. An unfair market advantage to religions.

Sweden only introduced the church/state separation 1991 years ago. So we already had all the social services in place at that time. So there was no good argument for any subsidy.

It should be pointed out that churches in Sweden can receive money from the state. But so can anybody who puts together any kind of non-profit club. Be it health club, chess club, scouts and so on. All it needs to be is some association of some sort with meetings and a non-profit status.

So that is similar to USA in that any non-profit can get similar tax exempt status.

One thing I ponder though is that by the use of property tax exemption and sales tax exemption, it puts the funding for the non-profit directly onto its own community, which, if it is to help low-income people, may be the place least able to support it.
edited to clarify: Because property taxes and sales taxes are collected by and for local governments; towns, villages, cities.

Yes. But the important difference is that a religious organisation is treated the same as any non-profit. If it is non-profit. If it is for profit then obviously it won't get any money. It's stance on god is irrelevant. The only thing that matters is if the organisation has as a goal to enrich the members.

Is Sweden's (or other countries') support from a federal level?
I think I'd like that better....

In Sweden the support is not on the federal level. It's one level down. We've got three levels: State, län, komun. Organisations apply to the middle tier. But USA is bigger. So I'm not sure how that would translate. An organisation that spans the whole country can't apply for money for all of it. Each local club has to apply all on their own. I have no clue whether this is a comparatively good system. Not sure how it can be improved. I'm generally against the state funding anything recreational. Primarily because it's mostly just rich kids who have the parents clever enough to figure this shit out. Most of the money goes to youth and sports organisations. Only a fraction of all Swedes are religious. So they won't show up on any statistic on this.

 

[Togo]

Why not base the tax-exempt status on what activities are carried out, rather than on whether the organisation itself is religious? I think you'd have to class 'running free religious services for the community' as a tax-exempt activity, in the same way as theatre groups, fetes, street fairs, schools, and so on. Other activities, such as investment or financial portfolio management, or property development, would not be.

 

[DrZoidberg]

Why not base the tax-exempt status on what activities are carried out, rather than on whether the organisation itself is religious? I think you'd have to class 'running free religious services for the community' as a tax-exempt activity, in the same way as theatre groups, fetes, street fairs, schools, and so on. Other activities, such as investment or financial portfolio management, or property development, would not be.

But why would any service deserve tax exempt status? What is the goal of it? Messing with the taxes are a way to change incentives for the market. Why would we want to do that for.. let's say theatre groups? What makes them so special?

 

[Loren Pechtel]

Do we still need tax-exempt status for churches?

Just because they are churches? No.

Now church based activities that benefit society in a non sectarian way (say like low cost to no cost to parent daycare) that should be tax exempt, but that should be taxed exempt whether or not a church is involved.

Yeah. Churches are basically just social clubs and should be treated as such.

Deductions should be based on charitable work, not the organization.

 

[NobleSavage]

Yes, they can be tax exempt. My only complaint is that they don't have to file a form 990 like every other non-profit.

 

[braces_for_impact]

Yes, they can be tax exempt. My only complaint is that they don't have to file a form 990 like every other non-profit.

Exactly right. Non-profits have to be transparent and show where the money goes. Churches don't have to do this. A small minority do, but most do not. If you want tax exempt status, it's in the public's best interest to be assured that the tax free money isn't going to some charlatan's 3rd corporate jet for their dog. Additionally, if you want this money, staying out of political endorsement MUST be enforced. If you wish to endorse, then no tax free money for you. Choose one or the other, not both.

 

[Tom Sawyer]

I think that it's unecessary and should be done away with. If a church offers services which are tax-exempt, such as charity work and the like, then it should be managed the same as any other organization with a charitable division. If the preacher wants to go on about how Obama's the devil and how everyone needs to vote for their local GOP Congressman or else Baby Jesus will cry, that should be fine too.

 

[Bronzeage]

I see no reason to encourage churches to become more involved in politics. In a time when the Supreme Court has declared corporations to have the rights of a citizen, freeing the churches to directly influence politics through their financial power would only create many more political corporations.

 

[AthenaAwakened]

And don't stop with the church proper.

Ministers get all kinds of exemptions too, far shadier than the churches.

 

[braces_for_impact]

Exactly right. The Parsonage Exemption is a classic example, with mega churches naming every single employee (sometimes numbering in the hundreds) as "pastors" or "ministers" in order to game the system.

Render to Caesar my ass...

This is why, even in my horrid financial situation I'm currently an FFRF supporter. They get shit done.